MANILA - Local output, measured as the gross domestic product (GDP), averaging as high as 7.5 percent this year remains a distinct possibility no matter the short-duration problems as congestion at Manila’s seaports, for example, according to two of the country’s top economic architects.
Socioeconomic Planning Secretary and National Economic and Development Authority (Neda) Director General Arsenio M. Balisacan particularly said the portside bedlam should not prove worrisome, as the disruptions it caused was seen as merely temporary.
“It is still possible for the Philippines to grow by 6.5 percent to 7.5 percent. We expect [the port congestion] to be temporary,” he told reporters on Friday.
Balisacan’s confidence and that of colleagues at the Development Budget Coordination Committee (DBCC) was such that the Cabinet-level body did not even bother to recalibrate the country’s target growth for the year.
At the Bangko Sentral ng Pilipinas, BSP Governor Amando M. Tetangco Jr. said the growth momentum the $270-billion economy gathered in the first quarter was seen persisting in the April-to-June period.
Like Balisacan, Tetangco remained positive that the Philippines picked up speed not just in the second quarter but in the succeeding months, as well.
Tetangco is an ex officio member of the DBCC, whose collective outlook for 2014 is that of an economy continuing to build on the fruits of fiscal and monetary reforms impl emented the past five years or so. He cited data pointing to a recovery of the Philippine economy in the April-to-June period, including that of manufacturing, government spending and even remittances.
Manufacturing posted double-digit growth in June alone while government spending picked up the same month after slowing down in the opening months of the quarter.
“Remittances continued to be positive in terms of the growth rate, more than 5 percent on average so these would provide the boost to consumer spending,” Tetangco said of the particular economic driver making up more or less 70 percent of the growth basket.
“All of these would point that the economy continues to be strong,” he quickly added.
Uncertainty over continued local expansion in the second quarter was fed by actual growth averaging at a lower-than-projected rate of 5.7 percent in the first three months.
Less bullish outlook by economists at Moody’s Analytics, for instance, helped fuel the reluctance to project more sanguine output during the period, the research unit of the sovereign credit watcher Moody’s Investor Service having been burned before when it projected first-quarter Philippine growth averaging 6.7 percent.
Actual growth in the first quarter averaged a full percentage-point lower than Moody’s anticipated to only 5.7 percent as public disbursement rates fell even as Manila has to spend more to rebuild wrecked infrastructures and redistribute disrupted services.
Balisacan said growth higher than 5.7 percent in the second quarter remain likely given the coordinated efforts of government and the private sector to ease the congestion at Manila’s ports which have proven a bane to business operations of trading firms and contributing to spikes in the price of services and goods.
The tight situation at the ports of the country’s capital had some inflationary impact on goods, helping push the country’s inflation to 4.9 percent in July, Balisacan earlier told the BusinessMirror. The manufacturing sector reported double-digit expansion in the second quarter, up from only 8.9 percent last year.
But no matter the continued optimism of government and private financial analysts, the Philippine Chamber of Commerce and Industry (PCCI) warned that clogging at the ports, coupled with the government order against unregistered or colorum vehicles, could cloud local output growth in the second quarter. The PCCI, however, said there remains the possibility that growth this year will hit the low end of the 6.5 percent to 7.5 percent projected growth range.